KATHMANDU, July 20: Foreign investors pledged to inject capital worth Rs 64.96 billion in the last fiscal year (FY), which was 4.9 percent more than the amount pledged in the previous FY.
According to the Department of Industry (DoI), Nepal received a commitment for foreign direct investment (FDI) worth Rs 61.90 billion in the FY 2023/24. In absolute terms, the FDI commitment rose by Rs 3.06 billion in the review year.
The DoI’s records show that 451 projects worth Rs 4.61 billion have been approved through the automatic route. Through the approval route, the Himalayan country received an FDI pledge for Rs 60.35 billion.
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The government gave the go ahead to 840 projects to operate inside the country. Sectorwise, the largest numbers of the projects were related to information technology. According to the DoI, the sector received investment proposals for 382 projects amounting the investment of Rs 1.85 billion.
In terms of investment amount, the service-oriented industry and tourism sector attracted most of the foreign investors. The DoI approved FDI of Rs 30.9 billion for 84 service industry related projects. Likewise, the tourism industry received the pledged FDI of Rs 26.82 billion for 304 new projects.
Similarly, cumulative investment of Rs 3.84 billion was approved for 55 manufacturing firms, Rs 25.5 million for one energy-related project, and Rs 1.46 billion was earmarked for 123 agricultural firms.
In the review year, there was an investment commitment worth Rs 50 million in two infrastructure projects, while the mining industry received none.
According to the DoI, as of now, Nepal received investment pledges of around Rs 600 billion from foreign investors. However, actual FDI realization stood only around one-third of the pledged amount, as per the estimation of Nepal Rastra Bank.
The Foreign Investment and Technology Transfer Rule 2021 has maintained that the foreign investors need to inject a maximum of 50 percent of the committed amount in the next one year from the date of taking the government approval.
For the pledged amount of Rs 20 million, half of the amount should be injected in the next one year. If the amount is Rs 250 million, the investors must invest 15 percent of the total amount in the prescribed time. The proportion is 10 percent and 5 percent for the committed investment of Rs 1 billion and more than Rs 1 billion, respectively.
